[2021] KEBPRT 374 (KLR)

REPUBLIC OF KENYA

BUSINESS PREMISES RENT TRIBUNAL

VIEW PARK TOWERS 7TH & 8TH FLOOR

TRIBUNAL CASE NO. 544 OF 2019 (NAIROBI)

AGNES NYAMBURA MUNGA T/A

UNISEX AERO SALO……….………...........….…………..APPLICANT/APPLICANT

VERSUS

CONVEST HOLDINGS LIMITED.………......................RESPONDENT/LANDLORD

RULING

1. By a motion dated 14th August 2019, the Applicant one Agnes Nyambura Munga T/A Unisex Agro Salon prays for striking out of the notice of termination of tenancy dated 8th March 2019 issued to her by the Respondent.

2. The Applicant further prays for an injunction to restrain the Respondent from interfering with her use and occupation of the suit premises.

3. The application is supported by the Applicant’s affidavit of even date in which she deposes that she is a common law widow of the late Bryan Walter Shepard who was a Co-director and 25% shareholder of the Respondent herein as per annexture “AMI”.

4. The Applicant contends that she was given a premise rent free on account of her husband’s relationship with the Respondent where she has been running a salon known as Unisex Aero salon for over 15 years.

5. On 26th May 2010, after demise of the Applicant’s husband, her co-wife in collaboration with the executrix of the deceased’s estate wrote to the Respondent instructing it to terminate the said arrangement and not to make any debits against the deceased’s internal director’s account.

6. The Respondent wrote to the Applicant requesting her to pay Kshs.70,000/- being rent for June 2010 @ Kshs.35,000/- and a deposit of Kshs.35,000/-.

7. On 8th June 2010, the Applicant’s advocates wrote to the Respondent demanding for past rent payment receipts and a copy of signed lease but the same was not responded to.

8. On 8th May 2019, the Respondent served the Applicant with a termination notice in respect of the tenancy which is exhibited as annexture AM4 under Cap. 301 Laws of Kenya on the grounds that she had continued to default in payment of rent since the year 2009 which arrears had accumulated to Kshs.3,682,000/- as at April 2019.

9. According to the Applicant, there is no Landlord/Tenant relationship between her and the Respondent.

10. In April 2018, the applicant rented out her salon to one Charles Ndolo vide a lease agreement dated 4th May 2018 pursuant to which she surrendered vacant possession to the new Tenant.

11. On 20th February 2019, the Respondent commissioned Upstate Kenya Auctioneers to recover Kshs.3,675. 000/- belonging to one Charles Ndolo.

12. The said Charles Ndolo filed Nairobi Cmcc Misc Application No. 661 OF 2019 pursuant to which negotiations on a settlement out of court were commenced on 6th June 2019.

13. On the same day, the premises were locked up by the Respondent.

14. According to the Applicant, the Respondent’s action was perpetuated out of spite and bad faith as any claim ought to have been directed against her deceased husband’s estate.

15. The Applicant contends that the income derived from the said office space was her only source of livelihood which prompted the current proceedings.

16. The Respondent opposes the application through a replying affidavit of one Haren Patel, a director of the company.

17. Among the documents exhibited by the Respondent is a copy of title marked HP 1 showing that the suit premises were registered in its name.

18. The Respondent denies knowledge that the Applicant was a “common Law” widow of Brayan Walter Shepard stating that there was no agreement for the Tenant to occupy the premises rent free and that invoices have been issued at all times.

19. The Respondent maintains that by the time of service of the termination notice she was indebted in the sum of Kshs.3,600,000/- as evidenced by annexture HP2.

20. This prompted the Respondent to instruct auctioneers to proclaim the Tenant’s goods to recover the amount as a result of which the Applicant became evasive pursuant to which the auctioneers applied for break in orders to recover and sell the proclaimed goods.

21. One Charles Ndolo filed civil suit no. 1536 of 2019 at Milimani Commercial Courts seeking restraining orders against the Respondent herein, Upstate Kenya Auctioneers and the Applicant herein seeking restraining orders as evidenced by annexure “HP6”. The said suit was pending by the time of swearing the affidavit.

22. It is the Respondent’s case that the Tenant/Applicant has no right whatsoever to occupy the suit premises “rent free as the legal owner thereof was a separate entity from her alleged husband.

23. By a Second motion dated 15th January 2021, the Tenant/Applicant is seeking an order of stay of the instant proceedings pending hearing and determination of Milimani Commercial Courts Civil Suit NO. 1536 OF 2019 as consolidated with Misc. Civil Application No. 601 of 2019.

24. The Tenant/Applicant further seek for an order to strike out the Landlord’s notice to terminate or alter terms of tenancy dated 8th May 2019 for lack of jurisdiction or for being frivolous and vexatious and thereby a gross abuse of the court process.

25. The Application is supported by the affidavit of the tenant sworn on even date and the grounds on the face thereof.

26. The Tenant contends that this Tribunal lacks jurisdiction as the tenancy is not controlled since there was no Landlord/Tenant relationship.

27. The amount quoted in the notice to terminate is in excess of the Tribunal’s jurisdiction in view of the Tenant/Applicant as its jurisdiction is capped at Kshs.25,000/- only by judicial precedence.

28. The Tenant further contends that the notice to terminate or alter terms of tenancy is caught up by the statutory period of limitation under section 8 of the Limitation of Actions Act.

29. Finally the Tenant avers that the tenancy notice is frivolous and vexatious and is a gross abuse of the court process under section 12(1)(k) of Cap. 301, Laws of Kenya.

30. It is the Tenant’s case that this matter and the one pending before the subordinate court relate to the same subject matter and that the parties were the same except the 2nd plaintiff therein.

31. The Tenant therefore pray that this suit be stayed pending hearing and determination of the Milimani Commercial Suit NO. 1536 OF 2019.

32. She also seeks that the Landlord’s notice to terminate or alter terms of tenancy be struck out for lack of jurisdiction.

33. The two applications were by consent ordered to be disposed of by way of written submissions.

34. The Tenant’s submissions were filed on 25th March 2021 while the Landlord’s submissions are dated 13th April 2021.

35. From the pleadings, the following issues arise for determination:-

(A) Whether or not the relationship between the Applicant and Respondent is a controlled tenancy.

(B) Whether or not the Applicant is entitled to the orders sought in both applications.

(C) Whether the tenancy notice issued to the Applicant is valid or not.

(D) Whether the tribunal has jurisdiction to adjudicate the issues herein.

(E) Who is liable to pay costs of the proceedings?.

Section 2 of Cap.301 Laws of Kenya defines a “controlled tenancy “ to mean a tenancy of a shop, hotel or catering establishment:-

(a) Which has not been reduced into writing or

(b) Which has been reduced into writing and which:-

(i) Is for a period not exceeding five years or

(ii) Contains provision for termination otherwise than for breach of covenant within five years from the commencement thereof or

(iii) Relates to premises of a class specified under subsection (2) of this section”.

36. The term “tenant” is defined in relation to a tenancy to mean the person for the time being entitled to the tenancy whether or not he is in occupation of the holding and includes a sub-tenant”.

37. The term Landlord “on the other hand is defined in relation to a tenancy to mean the person for the time being entitled as between himself and the tenant to the rents and profits of the premises payable under the terms of the tenancy”.

38. By her own admission, the Applicant in the documents filed herein describes herself as a tenant in respect of all that space in which she operates under the name UNISEX AERO SALON” in the premises owned by the Respondent as per the title document annexed to the replying affidavit to the first application.

39. As owner of the premises, the Respondent is clearly entitled to the rental income accruing from the same.

40. Although the tenant says that she is entitled to occupy the premises “rent free” as a common law widow” of Bryan Walter Shepard the claim is untenable in that she has not tendered any evidence to show there was such an agreement or that the premises were solely owned by her alleged late husband.

41. There is no legal justification whatsoever why the Applicant should occupy the Respondent’s property without paying a dime for the same.

42. I find and hold that the Applicant’s tenancy is a controlled one and this Tribunal has jurisdiction to deal with any dispute arising therefrom.

43. As to whether or not the Applicant is entitled to the reliefs sought in both applications, I submit that the answer thereof is tied to issue (A) above.

44. I have already found that the Applicant is a controlled tenant who is liable to pay rent to the Respondent. There is no evidence of rent payment of the amount claimed in the proclamation of attachment served upon her.

45. In absence of payment of rent by the Applicant, she cannot be entitled to protection from recovery by this Tribunal. In this regard I rely on the decision in the case of SAMUEL KIPKORI NGENO & ANOTHER – VS- LOCAL AUTHORITIES PENSION TRUST FUND (REGISTERED TRUSTEES) & ANOTHER (2013) eKLRwhere at paragraph 9 & 12 it was held by the superior court as follows:-

“9. A tenant’s first and main obligation is to pay rent as and when it becomes due, for the Landlord has the right to an income from his investment. Why should a tenant allow himself to fall into such huge arrears of rent”.

“12 The temporary injunction sought in the present application is an equitable remedy at the court’s discretion. He who comes to equity must come with clean hands. A tenant who is in huge arrears of rent is undeserving of the court’s discretion. The court cannot be the refuge of a tenant who fails to meet his principle obligation of paying rent as and when it becomes due”. (emphasis added).

46. In line with the said decision, it is inconceivable that the Tenant/Applicant can expect this Tribunal to grant her an injunction to restrain the Respondent from recovering rent arrears lawfully due to it. I decline to walk that path on the basis of the equitable doctrine that “he who seeks equity must do equity”.

47. As to the prayer for stay of proceedings herein to await determination of Milimani Commercial Courts Civil case no. 1536 of 2019, one needs to look at the parties and subject matter in both proceedings.

48. The instant proceedings were instituted by the Tenant seeking for injunction and striking out of the notice of termination of tenancy dated 8th March 2019.

49. Mimilmani Commercial Courts Civil case no. 1536 of 2019 was filed by one Charles Ndolo seeking to stop attachment of his proclaimed goods in the suit premises. The suit is against among others the Applicant, the Respondent and the Auctioneers.

50. The two matters are in forums with diametrically opposed jurisdiction with this Tribunal having exclusive jurisdiction to handle disputes pertaining to controlled tenancies “whereas the subordinate court’s jurisdiction is set out under the Magistrate’s courts Act and has no jurisdiction to hear and determine disputes like the instant one.

51. It would therefore be an abdication of legal duty for the Tribunal to stay, the proceedings on the basis of a matter filed in the Milimani Commercial Courts. As such I decline the invitation to do so.

52. As to whether this Tribunal has jurisdiction to adjudicate the issues herein, the answer is in the affirmative and I wish to adopt what I have stated in regard to issue (A) & (B) above.

53. As to whether the tenancy notice issued to the Applicant is valid or not, the answer lies in Section 7(1) (b) of Cap. 301, Laws of Kenya which allows a Landlord to terminate the tenancy of a tenant who has defaulted in paying rent for a period of two months after such rent has become due or payable or has persistently delayed, in paying rent which has become due or payable.

54. I therefore hold and find that the tenancy notice is valid.

55. I therefore proceed to make the following orders based on the above findings.:-

(a) The Tenant’s applications dated 14th August 2019 and 15th January 2021 have no merit and are dismissed with costs to the Respondent.

(b) The Tenancy notice dated 8th May 2019 served upon the Applicant is valid and enforceable.

(c) The Respondents costs of the two applications is assessed at Kshs.30,000/- as against the Applicant/Tenant.

It is so ordered.

DATED, SIGNED & DELIVERED this 30th day of JULY 2021.

HON. GAKUHI CHEGE

VICE CHAIR

BUSINESS PREMISES RENT TRIBUNAL

In the presence

Munge holding brief for Oketch for Respondent/Landlord

No appearance for the Tenant